75% of potential investors feel buy-to-let is a good investment

Our recent blog, 'Tax factors to consider when investing in property', attracted plenty of interest, so we decided to commission a survey to find out people's current views on buy-to-let as an investment after a year of economic uncertainty and political upheaval.

The results were surprisingly positive, demonstrating the belief that the underlying trend in property prices is up, regardless of interim fluctuations, and that prospective landlords are prepared to wait for long-term returns.

Statistics we uncovered included:

75% of respondents felt buy-to-let was still a good investment

With a shortfall in the number of homes for a rapidly-increasing population which isn't likely to be satisfactorily addressed in the near future, potential investors who do careful research prior to purchase are likely to be able to make a long-term profit. 25% of respondents, however, felt that they wouldn't get enough return on investment from the rental income.

76% of potential investors feel buy-to-let is a good investment

82% of Londoners surveyed felt it was a good investment compared to 71% of people in the South West

London has a very high proportion of people living in rented accommodation, and an analysis published in The London Intelligence earlier this year found that they now spend nearly a third of their income on rent. The average age of a renter in London is 32, and for many a mortgage is an impossible dream. It's unsurprising that people in this position feel buy-to-let could be a way to get a foot on the housing ladder, with a ready market at hand and a good return.

The annual rental price increase for the South West is currently down slightly from February 2019. A large proportion of buy-to-let properties in the South West are holiday homes, where the income is not as reliable month-on-month. However, the uncertainties of Brexit have driven many people to take staycations, and properties in the most popular areas come at a premium.

The age group 25-34 were the most bullish about buy-to-let, with 82% considering it a good investment as opposed to only 64% of 65 and overs

By the age of 65, many people will be starting to draw their pensions. The unknowns involved in a property investment may appear too dicey and a long-term strategy begins to look less attractive. For this age group:

  • 28% felt there wouldn't be enough return on investment
  • 41% specified increased tax and stamp duty rates
  • 19% were concerned about the fallout form Brexit
  • 13% cited difficulties obtaining a mortgage

Overall, 50% of respondents would consider buy-to-let as a pension investment, but this enthusiasm dropped off in the over-65 age group.

Our survey indicates that buy-to-let hasn't lost its appeal, particularly with younger generations who are having to find ever more inventive ways to become home-owners. Aspiring landlords appear to have realistic ambitions however, with a modest two-bedroomed house being the most popular type of property. A practical and careful attitude towards property investment, backed up by through research, appears to be on the increase, showing that whatever is happening on the political and economic front, property ownership remains the holy grail for the majority of people.

As experienced property accountants, we offer a bespoke service to both current and prospective landlords. Get in touch and let us help you to start or continue your property investment career with confidence.